Weekly report -- Dec 07, 2013

 

 

 

Hammersmith Marketing Ltd - Grain Trading

WEEKLY FEED GRAIN AND PROTEIN REPORT   December 07, 2013

 

Representative Office: +33.9.7044.4881   Mobile: +33.6.8068.4564    Fax: +33.4.5774.7575

13+220 Quartier La Galine, D-99, Mas Martin, St Remy de Provence, 13210 France

 

Corporate Office: Trident Services, Kings Court, Bay Street, PO Box N-3944, Nassau, Bahamas.

Email:   tradegroup@hammersmith.biz    WWW:  hammersmithltd.blogspot.com       SKYPE: bacon39a  

 

 

SECTION 1:  FEED GRAINS -- VEGETABLE AND ANIMAL PROTEIN

 

USA corn prices moved a little higher this week, as did Black Sea corn prices, but USA export corn looks to be very competitive in world markets at the current prices. While it is true that Black Sea corn from Ukraine and Romania will continue to do most of the business in their nearby markets in Egypt and North Africa, these origins are going to have to fight the USA for business in other markets where freight starts to be the deciding factor. If USA corn had all the GMO approvals that I needs into the EU, we would probably see US corn replace much of the Ukraine corn flowing into the EU this year – especially in Panamax ports.

 

Speaking of GMO, the corn rejection in China due to GMO is a concern with five cargoes reported to have been rejected. China has taken in excess of 700,000 m/t of US corn, heading towards at least one million m/t, and it would be a shock to see this come to a sudden halt. The traders don't seem to be overly worried but it has tended to put a ceiling on prices for now.

 

The estimated corn crop for Brazil for 2014 has been lowered but at 77.2 million m/t is still well above the USDA estimate of about 70 million m/t. Rains in Argentina are delaying corn planting there a little and at the same time good weather in France has allowed their corn harvest to get closer to the average and a good weather week this week should let them catch right up.

 

The USDA WASDE report is out next week and this, along with South American weather, should set the price direction for the next few weeks.

 

On the soybean/soymeal side of things, USA prices took a little step lower on the week with soymeal prices dropping by about USD 10 m/t while soybeans were only down by USD 5m/t or so. Most of the drop in prices was for shipment in Dec/Jan where the prices had been running at a bit too much of a premium over spring 2014 prices.

 

The soybean planting in Brazil is going very well and with a larger crop being forecasted it is going to be difficult to see any reason for mid-2014 soybean prices to move higher – that is unless the weather goes bad and the crop is reduced.

 

There is some feeling in the trade that the USDA WASDE report could show lower soybean ending stocks and this could give the market a wee push higher but so far this is only speculation. However, with USA soybean exports sales chugging right along the USDA could increase their export forecast which would lower stocks – we need to wait to see.

  

 

The USDA crop reports are finished for the year but then so is the harvest of most everything.

 

 

Estimated Bulk Grain freight in USD per m/t, basis heavy grains 

 

US Gulf to Europe: 60/70,000	$24.00
US Gulf to Egypt: Panamax	$36/40.00
US Gulf other Med: 25,000 MT	$41/43.00
US Gulf Israel: 50,000 MT	$37.00
US Gulf Morocco: 25,000	$41/43.00
US Gulf Turkey: 50,000	$38.00
US Gulf Japan: Panamax	$54/56.00
US PNW Asia: 45,000 m/t	$33/35.00
US PNW Japan: 50,000+ m/t	$30/32.00
France to Algeria: 25,000 m/t	$25.00
France to Saudi Arabia: 60,000 m/t	$30.00
Argentina to Egypt: 50,000	$42.00
Argentina to Algeria: 25/30,000 m/t	$41.00
Argentina to Morocco: 25,000	$40.00
Argentina to Saudi Arabia	$50.00
Brazil to Algeria: 25,000 m/t	$34.00
Brazil to Turkey/Egypt: 50,000 m/t	$35.00
Brazil to Morocco: 30,000 m/t	$33.00
Brazil to Saudi Arabia	$44.00
Black Sea to Spain: 30,000 m/t	$26/27.00
Black Sea to East Med: 30,000 m/t	$22/24.00
Black Sea to East Med: coaster	$35/38.00

 

  

FOB port or location specified. Prices in US$, in metric tons:

All shipments in bulk grain vessels unless stated otherwise

(NOLA is New Orleans, Louisiana, USA.)

 

Wheat, USA Soft Red Winter, NOLA	USD 278>>275 Dec/Feb
Wheat, USA Hard Red Winter 12 protein	USD 316>>309 Dec/Feb
Wheat, Black Sea 11.5 pro, 30,000+ m/t	USD 288/295
Wheat, soft milling, France, Rouen port	USD 291/293
Wheat, milling, Argentina, upriver	USD 340>>325 Dec>>Feb
Wheat, feed, Black Sea	USD 275/279
Wheat bran, Black Sea	USD 180/190
Barley, France, Rouen port	USD 253/255
Barley, feed, Argentina, upriver	USD 220>>210 Jan/Feb new crop
Barley, feed, Black Sea, 30,000+	USD 245/248
Barley, feed, USA Pacific Northwest	USD 235/240

 

Corn, FOB NOLA USA	USD 210>>204 Dec>>Feb
Corn, FOB USA Pacific northwest	USD 235>>226 Dec>>Feb
Corn, FOB Argentina port, upriver	USD 205/210 March new crop
Corn, FOB Brazil port	USD 193/197 new crop
Corn, FOB Black Sea, 30,000+ m/t	USD 206/209 Spot>>Feb
Corn, FOB France	USD 251/255 Dec/Jan
Sorghum, FOB Texas, low tannin, GMO free	USD  221/226 Dec/Jan/Feb
Sorghum, FOB Argentina port, high tannin, GMO free	USD  190/200 Dec/Jan/Feb
Sorghum, FOB Black Sea - Ukraine	USD  230/233 Dec/Jan

 

Soymeal,  48 protein, FOB NOLA	USD 542>>538 Nov>>Feb 2014
Soymeal, 48 protein, USA, Rotterdam	USD 579>>559 Spot>>Feb 2014
Soymeal, Argentina, Rotterdam	USD 573>>560 Spot>>Feb 2014
Soymeal, 47 pro, FOB Argentina	USD 520/525 Dec/Feb
Soymeal, 48 protein, Brazil, Rotterdam	USD 570>>550 Spot>>Feb 2014
Soymeal, FOB Brazil	USD 516/520 Dec/Feb
Soymeal, 48 protein, India FOB	USD 565/575
Soybeans, FOB NOLA	USD 520/525 Dec/Jan
Soybeans, Argentina, FOB	USD 486/491 new crop May 2014

 

 

Bulk vessel shipments, minimum 5000 m/t

 

Corn Gluten Meal, USA FOB NOLA	USD   780/790 m/t
Corn Gluten Feed, USA FOB NOLA	USD   230/235 m/t
DDGS, 35 profat, USA FOB NOLA	USD   306>>298 m/t Dec>>Feb
DDGS, 35 profat, CNF Asia	USD   366>>358 m/t Dec>>Feb

 

 

Corn by-products prices don't seem to be reflecting the drop in corn prices as yet, although all the trade reports say that lower priced new crop corn is flowing into the corn processing facilities. Perhaps the firmness in the prices is still a result of the lack of news after the Thanksgiving holidays in the USA.

 

This week it was very difficult to get a good idea of the DDGS export prices with most exporters sold out now into February and containers getting harder and harder to find. FOB USGulf prices seem to have quite a wide spread, wider than I show above as I did not believe some of the prices I had seen, plus the container rates are very strong and are pushing up CNF prices.  

 

Corn gluten meal prices did drop a little this week but that may just be because they export indications were a little too high for the past couple of weeks. On corn gluten feed there seems to be a very wide range of prices in the market with a spread of close to USD 20 m/t between exporters, probably due to who has cheap new crop corn by-products.

 

It is expected the USA FOB prices could slide a little lower but with very strong freight rates there may be no drop in CNF prices.

 

 

USDA export shipments – January to October 2013 – in m/t – major destinations

 

	Soybean Meal	Distillers Dried Grains -- DDGS	Corn Gluten Feed	Corn Gluten Meal
Canada	376,000	120,100	25,400	54,300
Chile				98,900
China		1,062,700
Columbia	121,900		25,400	65,200
Denmark	102,900
Dominican Rep.	133,900
Ecuador	142,800
Egypt	132,200		25,100	114,900
Guatemala	127,500
Indonesia		53,300		227,100
Ireland		64,100	284,500
Israel			140,300	20,100
Japan		96,100		31,700
Malaysia				59,800
Mexico	564,400	315,700		63,200
Morocco			41,700
Philippines	404,400
Poland	158,800
South Korea		102,900	29,500
Taiwan		58,100		28,000
Thailand		64,900		28,300
Turkey	148,600	83,500	110,200
Venezuela	311,100
Vietnam	140,300	99,500		24,100

 

Container shipments, minimum 200 m/t

 

Argentina Meat & Bone meal, 45 protein	USD  sorry no updated prices this week
Paraguay Meat &Bone meal, 45 protein	USD        "       "
Europe MBM 50 protein	USD        "       "
Australian MBM 45 protein    Australian MBM 50 protein    Australian Feathermeal    Australian Poultry meal, pet food grade	USD 520/530 m/t CNF Asia USD 560/570 m/t CNF Asia USD 640/650 m/t CNF Asia USD 830/850 m/t CNF Asia
USA Meat & Bone meal, 50 protein    USA Feathermeal, 80 protein    USA Poultry Meal, feed grade    USA Poultry Meal, pet food grade	USD 560/580 m/t CNF Asia USD 660/680 m/t CNF Asia USD 600/620 m/t CNF Asia USD 830/850 m/t CNF Asia

 

The following indications are at producer's factory, ex-works in bulk

 

Meat and bone meal, USA, 50 protein	USD 470/490 m/t
Feathermeal  80 protein USA	USD 600/620 m/t
Poultry meal  57 protein, Eastern USA	USD 520/540 m/t

 

 

 

Demand from Asia has pushed export prices from most origins a little higher this week, except perhaps from Paraguay where exporters say that they are suffering from a lack of export business. Domestic demand in the USA and Australia is also helping to keep animal protein prices quite firm. One trade report says the export MBM prices from Australia and New Zealand are up close to USD 90 m/t but I have not seen such large increases so far.

 

Animal protein prices are expected to be firm over the next few weeks as most exporters are sold out into late January. Of course, all the holidays over the next few weeks are also leading to firmer prices as sellers probably have little to offer and buyers want to cover the last of their early 2014 needs before the holidays.

 

Just a note: there is a possibility that I may have to stop the coverage of animal protein prices in 2014 as it is getting harder and harder to get decent information on where the domestic and export prices actually are. Some of my sources have disappeared as people retire or as companies are just not too willing to provide information for publication. With grains it is easy as prices are everywhere but with specialty items, like animal proteins, information is much harder come by.    

 

 

 

USDA export shipments – January to October 2013 – in m/t – major destinations

 

	Meat and Bone Meal Incl poultry and pork	Feathermeal
Canada	37,200	8,100
Chile		43,500
China	18,100
Guatemala	10,100
Indonesia	55,500	101,000
Mexico	23,400
Philippines	27,700
Thailand	13,000
Vietnam		4,400

 

 

SECTION 2 --- FISHMEAL COMMENTS AND PRICES: PERUVIAN

 

The catch in Peru is now just over 1.2 million m/t which leaves about 1.1 million m/t still to be landed to finish off the quota. Daily catch numbers have fallen a little and are now just under 50,000 m/t per day. At this catch level the quota will take at least another three weeks to complete but could probably stretch into mid-January – AGWWP (all going well, weather permitting).

 

Business is a little slow in Peru at present and as a result the export prices have drifted lower by a few dollars and could perhaps move a little lower if there is not some new business in the market. European buyers seem to be totally out of the Peru market at present but the local trade does expect them to be back in soon or so they hope.

 

There was some interesting information in the MSI Ceres report this week:  fishmeal exports to China represent just over 60% of all Peruvian exports, up from 40% ten years ago while shipments by container to China are now 100% of the business while only two years ago about 45% was shipped in break bulk – quite a change. Looking back to 2001, China was just 32.5% of Peru exports and less than 4% of exports to China were by container.

 

The results of production in Peru this season have shown a lower level of oil and a higher level of FFA in the fishmeal. Producers are finding that production levels of the highest grades of fishmeal have dropped due to the FFA levels. The FFA level, if it continues to be high, could push up the price of better grades.

 

 

 

PERU "INDICATION" FISHMEAL PRICES:

 

 ALL PRICES SHOWN ARE IN CONTAINER, ON VESSEL, AT ORIGIN --- US DOLLARS

Minimum shipment of 200 m/t for fishmeal

 

Specification	Price per m/t FOB vessel Peru port
65 protein	1300/1320 m/t
65/66 protein	1320/1340 m/t
67 protein standard steam	1340/1360 m/t
67 protein SD 150  TVN	1360/1380 m/t
67 protein SD 120 TVN	1380/1400 m/t
67 protein SD 1000 hist, 120 TVN	1410/1430 m/t
68 protein SD 500 hist, 120 TVN	1430/1450 m/t
Fish oil, crude bulk	1750/1800
Fish oil, crude drums	1950/2000
Fish oil, flexi tank	1900/1950
Fish oil, Omega 3: 28%EPA/DHA	2350/2400

 

INFORMATION:  gtee = guarantee, TVN = total volatile nitrogen, hist = histamine,

FAQ = fair average quality (normally flame or hot air dried), SD = steam dried

           

Wayne Bacon

 

The information contained herein is based on sources that we believe to be reliable, but we do not represent that it is accurate or complete.  Nothing contained herein should be considered as an offer to sell or a solicitation of an offer to buy.  All references to prices are subject to change without notice.  Any opinions expressed herein are solely those of the author.  As such, they may differ in material respects from those of, or expressed or published by or on behalf of, Hammersmith Marketing Ltd or its officers, directors, employees or affiliates

 

Copyright © 2013 Wayne S. Bacon